If you baby sat in your own home, that income is self employment income. If you baby sat in the client's home, you could be considered a "household employee". The house cleaning work could be classified either way, depending on the details (see the other answer).
The “Nanny Tax” specifically refers to the
social security & medicare tax ("FICA") paid on a household employee’s (nanny, maid, baby sitter,
gardener etc.) wages. The most proper way to report your income would have been
for your employer to have given you a W-2. In practice, this is seldom done.
That having not been done, the 2nd best choice is for you to report
it as self employment income on schedule C, paying your own social security tax
( “self employment” tax) on schedule SE.
If the Household employee wages were from more than one employer and no
single employer paid your more than $2100, you may be able to avoid the self
employment tax. But, you will also not get credit for these wages with the
Social Security Administration, for future benefits.
In TurboTax, enter at:
Federal Taxes
Click on Wages and Income
Scroll down to Less Common Income
On Miscellaneous Income, 1099-A, 1099-C click
the start button
On the next screen click the start button on
Other Income not already reported on Form W-2 or Form 1099
Answer Yes on the next screen and continue the
interview until it completes.
TurboTax puts the amount on line 1 (wages) of
form 1040 (line 7 prior to 2018) with the notation “HSH”. It is considered
earned income.
Be advised, the IRS frowns on claiming the Earned Income Credit, for household employee wages without paying FICA. Your audit risk goes up by doing so.
